In a move to "rebalance" its resources and focus on investing, venture capital firm NFX laid off four employees in September. The layoffs included one product leader and three engineers, as revealed by general partner Pete Flint in an interview with TechCrunch.
Why the Rebalancing Effort?
According to Flint, the firm has found that it can use artificial intelligence (AI) to achieve the same level of output with fewer people. As a result, NFX is shifting its resources from its software and product teams to its investing team.
Impact on Product and Engineering Teams
While the firm’s product and engineering teams remain large, the layoffs were primarily focused on these areas. Flint emphasized that the investing team was not affected by the rebalancing effort.
New Opportunities for Investing Team
The freed-up resources from the layoffs will be used to double down on the investing team. NFX plans to hire new folks for the investment team in both San Francisco and Israel, as Flint highlighted the importance of expanding this area.
Promotions Within the Firm
In addition to the rebalancing effort, NFX has also promoted multiple members of its current team. Sarai Bronfeld was promoted from principal to partner in July 2023. She had been with NFX since 2021 and is based in Tel Aviv. Daniel Museles was promoted to principal as well. He joined the firm as an associate in 2022 and is based in San Francisco.
Future Outlook for NFX
Flint expressed that the firm may end up with more people on the overall NFX team than before the rebalancing effort. This is due to the focus on expanding the investing team, which has been successful so far. The investment team is expected to increase by 20%, with Flint stating that "that’s really the focus for us."
Background on NFX
San Francisco-based NFX was founded in 2017 and invests in pre-seed and seed-stage companies across various categories, including biotech, gaming, generative AI, and fintech. The firm has raised nearly $1 billion across three early-stage funds, as well as one opportunity fund.
NFX’s Software-Driven Approach
As one of the first VCs to approach venture investing with a software and data-driven strategy, NFX has built its own internal software to find and evaluate companies. However, with the advancements in AI technology, the firm has found that it can achieve similar results with fewer people.
Comparison to Other VC Firms
NFX is not alone in restructuring resources and letting go of staff. In recent times, other venture capital firms have also undergone significant changes. For instance, Initialized Capital announced it was trimming multiple partners and investment support staff last week, resulting in an estimated 36% reduction in staff.
Similar Layoffs at Other VC Firms
Greycroft laid off five investors last fall, while Sequoia Capital cut a third of its platform team in 2023. These developments highlight the challenges faced by venture capital firms in adapting to changing market conditions and technological advancements.
About NFX
NFX is a venture capital firm based in San Francisco that invests in pre-seed and seed-stage companies across various categories, including biotech, gaming, generative AI, and fintech. The firm was founded in 2017 and has raised nearly $1 billion across three early-stage funds, as well as one opportunity fund.
Contact Information
For more information on NFX or its investment strategy, please visit their website at www.nfx.com or contact them directly through their email address: info@nfx.com.
Sources
Latest Updates
For the latest updates on NFX and its investment strategy, please follow their LinkedIn page at linkedin.com/company/nfx.
